There are two approaches to the problem of allowing exchange between mutual credit circles.
The first approach is to create a meta circle, which is to say, a new currency. This leads to a plethora of currencies, and to each user having a plethora of balances, and then on to the hugely complex business of creating a secondary market in currencies with floating exchange rates, brokers, speculation etc. This is how national currencies work now, and local currencies could work in the same way. I agree that non-hour based currencies should have the option of 'floating' on a free market. The infrastructure required to manage all of this cumbersome but not crippling. So saying, the cc movement can't support all this at the moment. To the extent that we go down this road, we will, in the early days be faced with all sorts of technical limitations which will make the currencies cumbersome to use.
Michael Linton is proposing that we take this to the extreme; that currencies should be numerous and unregulated, and the best will rise to prominence. Most people are unable to take that leap and prefer the confidence that their currency is redeemable, rather than the confidence that someone will extend them credit in some other currency.
The 'intertrading' approach practiced by CES and many of the Tauschringe uses proxy accounts for all outside transactions. I have described this in detail elsewhere. This has the advantage that everyone trades in his 'native' currency, and the conversion is done at an agreed rate.
Doing this with mutual credit systems really highlights the balance of trade problem. A community that buys more than it sells from outside will soon have a balance-of-trade problem, where the intertrading account holds a large positive balance and all the members are hovering around their nominal minimum limits. Meanwhile their neighbour will be experiencing the opposite problem until the balance of trade can be restored. Some would say this isn't a problem, this is an accounting system premised on balanced economies. the communities have to work together so that they trade equitably. For me this isn't a problem. I like this approach because it is easy to use and creates a balanced, cellular economy.
The main limitation of the intertrading approach is with the exchange rates. In the real world, the value of different things goes up and down, and you can't always value one thing in terms of another. How many loaves of wholemeal organic bread is your kidney worth? But exchange rates are not a problem if everyone is on the same baseline; and in the current climate of creating an alternative to national currencies, the baseline is always hours of labour.
So the synthesis is to have an intertrading network where hours of labour are traded, but with attention being paid in each cell to the balance of trade. Each member cell in the network will need to have some kind of oversight, or comply to some standards the most important of which concern the balance of trade. The infrastructure shouldn't be limited to just to just these currencies, however. It needs to be possible to create arbitrary currencies and hold several in your wallet. Later we will make that easier.
The task now is to make an extensible intertrading network which uses the hour as the base unit. We must leave room for other-based currencies for when the resources are available.
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